Economic performance and outlook table (a)

 

2016-17

2017-18

2018-19

2019-20

2020-21

2021-22

 

Outcome

Forecast

Projection

Real state final demand

3.9

3

3

-

-

Real gross state product

2.9

3

Employment

1.0

3

Unemployment rate (b)

5.0

Sydney Consumer Price Index (c)

2.0

2

Wage price index

2.0

2

3

Nominal gross state product

6.4

5

4

5

5

Population (d)

1.6

1.6

1.6

1.5

1.4

1.4

(a) Per cent change, year average, unless otherwise indicated.
(b) Year average, per cent.
(c) 2017-18 to 2020-21 include ¼ percentage point contribution from tobacco excise increases.
(d) Per cent change through the year to 30 June. Forecasts are rounded to the nearest 0.1 percentage points.
Source: ABS 5206.0, 5220.0, 6202.0, 6401.0, 6345.0, 3101.0 and NSW Treasury
 

New South Wales’ economic outperformance, which began in 2014-15, continued in 2017-18 with expectations of 3 per cent economic growth. This will mark an exceptional four-year period with economic growth above trend (2½ per cent) and above the national average. Household consumption, public infrastructure, dwelling construction and service exports have been the key drivers of this strong performance.

The NSW economy is forecast to perform well in 2018-19 and 2019-20, with gross state product (GSP) increasing by 2¾ per cent in both years. Growth drivers are shifting from
dwelling construction and household consumption, towards business investment and more broad-based strength in exports.

The State’s record infrastructure program and its spillover into private investment continues to drive growth. Almost half of the national pipeline of public engineering projects underway is in New South Wales. Strengthening global and national economies are expected to boost exports, spurring businesses to lift investment and employment.

The labour market is experiencing strong momentum, with employment growth of 3 per cent forecast in 2017-18. This has fostered near record workforce participation, which combined with above-trend population growth is expected to see the unemployment rate stabilise at around 4¾ per cent over the forward estimates. 

A tightening national labour market, rising advertised salaries and emerging wage pressures in certain industries set the preconditions for a modest rise in wages growth over the next few years.

Strong jobs growth has provided a boost to household income and consumption in 2017-18. Over the next two years, the prospect of easing house prices, modest wages growth, elevated household debt and tightening financial conditions are expected to keep consumption growth below its long-run average. 

A more detailed economic outlook can be found in the 2018-19 NSW Budget

Last updated: 11/07/2018